How Do I Qualify for a Private Student Loan

Education is taken as the key to the development and prosperity of any country. This assumption is the reason why governments all around the world, including Singapore, have put substantial investment in the sector. Besides, the private and corporate worlds have made significant strides to secure an enabling environment for citizens to acquire quality and practical education for their economies as well as for future generations. While in college, you may borrow money online for your upkeep. But are the requirements the same even for student loans.

Private Student Loans

Education is as vital as its financing. Other than students’ grants and scholarships, learners have to grapple with loans with incurring interests over time to ensure a smooth flow of their education sessions. Scholarships and grants are severely limited. They cannot match the increasing number of students who enroll annually to institutions of higher learning in their thousands. Hence this brings up the need for student financing.

A private student loan, therefore, is the financing available for learners on the application, and earns interest on top of it. However, the interests which are chargeable on these loans are lower compared to the prevailing rates in the market for conventional
loans. Nevertheless, different lenders offer different loans based on the student category, age, level of education and repayment abilities. Hence the loans have diverse qualifications guidelines and requirements.

This article will take you through how you can qualify for a private student loan and all you need to borrow money online. Lenders have increasingly made it easy for students to apply for loans. You can conveniently apply for online loans with less complicated procedures and requirements. For instance, you will not be asked to present collateral to activate your loan processing.

What are the Requirements for Private Student Loans?

As stated earlier, lenders have tried to simplify the process of obtaining these loans.  Other than the evidence of being a student and proof of being a citizen who is of age, there aren’t too many complicated requirements, especially when applying with a co-signer. Otherwise, when applying without a guarantor even for a payday loan you may need to prove your creditworthiness.

You may prove you are worthy of credit by checking your credit score or providing information about your income and the estimated amount you have been approved to receive elsewhere in terms of tuition fees.

Other than a proof of financial aid, you may also be asked to produce a full disclosure of income flow. Though not as strict as the other conventional lenders, private student financiers may ask for proof of income which may be a few bank statements, pay stubs or tax documents.

Private Student Loans Applied with a Guarantor

For you to qualify for a loan, your parents, friends or spouses may guarantee your loan by agreeing to step in and help you repay the loan when an incident occurs, and you are unable to honor the payment terms. By agreeing to shoulder the loan responsibilities together with you, the lender is assured of alternative means of recovery. However, there are conditions which must be met to make the guarantor eligible. They include;

• The guarantor should demonstrate receipt of income. Lenders want to verify that if a person is co-signing for you, then the person should be earning an income and it needs to be verifiable. Implying that the guarantor’s employer should be able to as certain that the said person is under the payroll of the company.
• Needs to have an outstanding credit history. While submitting your application, ensure your guarantor’s credit rating is good enough to guarantee eligibility. The co-signer should be able to show an impeccable credit record. All debts must have been paid in time, and all financial obligations met without fail and in a reasonable time frame. The report should not indicate any late payments or defaults in the credit bureau assessment.
• Should not be bankrupt. The guarantor must not have been declared bankrupt by a court of law at the time of application. Also, the guarantor should not have financial court proceedings or any form of delinquencies.
• Have no unpaid student loans. Your co-signer should not have any pending debts,especially with the student lender. The whole essence of having a guarantor is to ensure, in case you default on a debt, the guarantor should step in and help to repay it. If you include a student loan defaulter as your guarantor, then your loan is likely to be denied.
• Be of legal age and a Singaporean. The prospective guarantor is required by law to be legally recommended age of 18 years and be a citizen of Singapore.

Generally, if your loan gets approved with a guarantor, then your interest loans are likely to be very low since you don’t pose a severe risk to the financial security of the lender. Unlike when applied without a guarantor, the rates are likely to be ridiculously high. It is therefore advised you include a co-signer in your application.

How Much Are You Eligible to Borrow?

Many lenders restrict finance based on how much aid or scholarships you receive. However, some put an annual cap on the amount you can borrow annually and let you decide just how much enough is. You should, however, note that you should only borrow the amount which is required. You don’t want to be weighed down by debts in future.

What Is the Maturity Period for Your Loan?

Depending on the lender you are doing business with, you can start paying whenever you are able.But the grace period is usually three months, but this again depends on your contract with the lender.

The Bottom Line

As stated clearly, there isn’t any significant difference between this financing and the rest, other than the leniency portrayed by the lender. However, it doesn’t mean that you do not have to pay your loan. Of all the credits, student loans are never dismissed even when you get declared bankrupt. In case of a default case, your lender will call upon your guarantors to start paying up and then report you to the credit bureau. This will have big damage on your credit score.